With minimum wage on the rise and it being set to increase again to £11.44 many would assume the cost of living crisis would be a declining issue.
However, Elizabeth Morris, aged 21, who works for Goals in Kirkstall said “Minimum wage is a joke, it does not take into account various different elements of day to day costs.” According to the pre-released extracts of finance misters Jeremy Hunts speech for the reason for the increase in minimum wage, it will be “improving the lives of working people” by “ending low pay”.
Councillor Paul Wray spoke about minimum wage and its ineffectiveness as it does not take into account additional factors, he said: “the real living wage foundations and calculation takes account properly of a whole wide range of inflationary pressures, particularly on on on poorer households where inflation, particularly bites a lot harder than it does for households.”
The graph below shows that this may not end up being the case as the costs of other influences of life such as house prices and interests rates:
Minimum wage has increased by 16.95% since October 21, that is a huge increase. However the interest rates has gone up by 7.23% as shown on the graph meaning that a borrower will have to pay a 7.23% on top of their loan which decreases the effectivity of the increased minimum wage.
The second graph depicts the increase in rent prices and house prices, it is a very dramatic increase. Leeds Borrowers on minimum wage “would have to borrow up to seven times their yearly income for a mortgage” said councillor Wray. So even with the increase in minimum wage, the idea is rendered useless as housing prices are too expensive.
Councillor Wray spoke on next years plans to rise the minimum wage again, he said: “So even though it’s going up, which is great, but not as much as we would like it to go by, actually there’s a real issue around the the non taxable allowance being frozen, which means a lot more people will now be dragged into tax that weren’t paying tax before.”
The video below explains the how the increase in minimum wage will have no effect on decrease in the cost of living crisis:
